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The other day, we came across an article in Yahoo! News about eCommerce being insulated from declining consumer confidence. We read that even though there are some reports on declining consumer confidence, eCommerce companies and industries directly related to them are reporting no slowdown in sales.
Digging into US sales data from November and December of 2018 proved this out. eCommerce sales for that period in 2017 were $103 billion out of a total retail sales number of $681 billion. For the same period in 2018, there was a 17% increase in online sales. But even with that increase, online sales only accounted for 16.7% of the total retail sales volume of $720 billion dollars.
Even companies that service the online sales ecosystem have posted record numbers. UPS beat their earnings for the fourth quarter and set a record for package shipments. Their CEO David Abney is quoted as saying, “E-commerce is providing all kinds of opportunities.”
Even more compelling for growing and emerging brands was how mid-size businesses and even small businesses were growing despite the continued success of larger retailers in the eCommerce space (think Amazon and Walmart).
This good news is reflected in what we see eCommerce brands are actually doing- Investing in brick and mortar.
Shopify, which we all know as eCommerce’s tech darling, is moving into physical retail support for eCommerce brands on their platform. They’re now offering hardware and software that facilitates selling in a physical format. They’ve rolled out software that helps brands do things like ship from store and buy online pick up in store. They’re also providing point-of-sale hardware to brands. All of this on a subscription-based model, just like their eCommerce platform. They now even have a Shopify retail services store in LA where you can walk in, see the hardware in action, and place an equipment order for your brick and mortar storefront.
And if you’ve been monitoring eCommerce trends over the past 2 or 3 years, you’ll notice everything the experts were saying playing out in front of us right now.
This move to physical retail by digitally native brands is also a testament to an evolving set of consumer expectations. Consumers in 2019 want to be able to experience a brand the way they want- to buy online, pick up in store, to buy online, return in store, to get free next day shipping because their order shipped from the physical store 2 miles from their apartment…
There’s so much opportunity out there right now for eCommerce brands, so much ground to cover with connecting the physical and digital shopping worlds, and certainly, if we look back at the data, where we say eCommerce sales representing just 16.7% of the total retail sales, there’s much more penetration opportunity right now for eCommerce brands.
It’s interesting to see how brands are catering to their customers. They’re responding to the needs of their customers. They’re seeking to serve them across several channels, whether it’s online, through a major retailer, a boutique or in one of their own stores.